Netflix Promises Top Spots for Advertisers at Upfronts Debut, Claims 5 Million Ad Tier Members

Dan Meier 18 May, 2023 

Netflix’s ad tier now has 5 million subscribers globally, the streaming company announced at its Upfront presentation, suggesting a substantial jump from reports of 1 million US subs in March.

The company’s Upfronts debut was scuppered by the writers’ strike (not the first interruption Netflix has experienced to live events), and like the Warner Bros. Discovery (WBD) presentation it was moved online – though the striking writers have focused much of their anger specifically on Netflix.

But the company was upbeat on advertising, highlighting the high levels of engagement on its AVOD tier. Netflix said around 25 percent of new signups are choosing the Basic with Ads tier, and 75 percent of ad-supported members are 18-49 years old. According to the company, Netflix ad tier subs have a median age of 34, and nearly 80 percent of viewing takes place on TV.

“The cultural zeitgeist”

Acknowledging that the ad business “remains in its infancy”, the streaming giant announced that advertisers will soon be able to sponsor popular Netflix series at launch, initially only in the US. They can also align campaigns with local holidays, for instance by running Valentine’s Day promotions on romance titles; and “key brand moments”, such as sustainability promos on nature documentaries.

The streaming service also touted its Top 10 offering, which guarantees ad placement on its daily Top 10 titles. “Brands can become part of the cultural zeitgeist by aligning themselves with Netflix’s biggest hits,” the company said.

Co-CEO Ted Sarandos additionally suggested “a 30-minute commercial” that would play out “over several days” across different shows being watched by the same user. “This isn’t going to happen overnight, and maybe not even next year,” he added.

“Driving engagement”

Netflix also promoted its measurement partnerships with Nielsen and EDO. The launch of Nielsen ONE will allow US advertisers to use Nielsen DAR (Digital Ad Ratings) for deduplicated audience measurement metrics on Netflix, starting in Q4. 

Meanwhile the EDO metrics show that “Netflix outperforms the streaming and linear averages when it comes to driving engagement,” according to the streaming firm, with viewers four times more likely to engage with ads on Netflix than other streaming services – and four and a half times more likely than linear TV.

Netflix ad chief Jeremi Gorman said the reach on Netflix compared with rival services is “the difference between foundational viewing and simply sampling.” She also noted the introduction of third-party verification through DoubleVerify and IAS, and said the company is building frequency caps to limit ad loads to 4-5 minutes per hour.

“The eye of the beholder”

The presentation saw Netflix state its ambition to revolutionise advertising the way it previously disrupted streaming. “Netflix shows and movies are generating global audiences that are many times bigger than our closest competitors,” said Netflix co-CEO Ted Sarandos.

Co-CEO Greg Peters reiterated the popularity of the streaming service over its rivals, including a dig at WBD’s “The one to watch” tagline for its upcoming SVOD service Max. “To be the one to watch, you need everyone watching,” said Peters.

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